08 Oktober 2014

[081014.EN.SEA] NYK Box Trade To Be Flat, But Back To Black With Coming LNG, Shale Gas Help

JAPANESE
shipping giant NYK expects to move into profitability this
year despite troubles in the container business, said president Yasumi Kudo in
an address on the firm's 129th birthday.

"For the current fiscal year, despite forecasts that
freight rates for Europe will remain mostly flat year on year, while those for
North America will worsen slightly, we are expecting to move into the
black," he said.

He attributed this progress to cost savings from
bunker-saving IBIS and the box use optimization EAGLE projects, to reduce
wasteful activities and increase efficiency.

"Furthermore, we will be introducing eight new
ultra-large, energy-conserving 14,000-TEU ships, starting with four in 2016
followed by another four in 2017.

"This is expected to result in cost reductions of
over US$192.7 million per year. In the current situation, only a few
containership operators are operating in the black." said Mr Kudo.

"Most accumulate losses," he said. "It is
thought that any drop in freight rates will be limited in the future, and
stable profits are thus within sight for our liner trade business from fiscal
2016 onwards."

Keying in on NYK corporate strategy called "More
than Shipping", Mr Kudo reported on the companies investments in liquefied
natural gas (LNG) and shale gas fuel.

"We are in an LNG-related upstream business through
our acquisition of a partial interest in jointly owned facilities in the
Australian Whetstone gas field and operation," he said.

"Operations here are due to begin at the end of
2016. We have decided to take part in the Cameron LNG Project, a mid-stream business
that will construct and manage a liquefaction facility for shale gas in
Louisiana in 2017.

"We expect these projects to deliver a long-term
high return and to make a significant contribution to the expansion of the LNG
shipping business.